Russia is Iraq's closest ally on the council and wants embargoes halted rather than changed. Last week Ivanov said Moscow would offer an alternative to the U.S.-British proposal.

News of Russia's position came hours after U.S. Secretary of State Colin Powell admitted that the council might not meet its self-imposed July 3 deadline for adopting revised sanctions.

"We have been unable to resolve all the technical issues," he told Reuters. "If no resolution is arrived at, we will have to figure out what to do -- how to extend the current situation and how long."

The central issue is a resolution to ease restrictions on civilian goods, enforce bans on military hardware and clarify "dual use" supplies that can be used for both military and civilian purposes.

If an agreement on changes to the sanctions is not reached, the council is likely to continue the current oil-for-food programme.

A December 1999 resolution -- which Russia wants to refine -- demanded that in order to suspend sanctions, Iraq must allow U.N. arms inspectors back into the country to check on its "weapons of mass destruction" programmes.

U.N. inspectors have not been allowed into Iraq since they left in December 1998.